It’s a big week for the Germany 30 as traders brace for a deluge of earnings from DAX components.

With around half the DAX earnings due this week here’s our look at a few of the major stocks reporting.

Deutsche Telekom

 

Shares in Deutsche Telekom have fallen around 14% in the last two months. Investors have been cooling since the group posted a net loss of €2.1bn in the fourth quarter of last year following a €2.2bn writedown on its investment in BT.

Goldman Sachs notes that Sprint-Comcast/Charter discussions have “undermined” the strategic opportunity of T-Mobile US. Nevertheless the bank says DT “offers above average growth and strategic optionality, but trading at a discount to peers”.

In 2016 TMUS added 4.1m customers with revenues rising 16% to $37bn and earnings up 29% to $9.5bn. “This boom is set to continue,” Deutsche Telekom said. HSBC agrees and pointed to “happy days” at T-Mobile US after a solid Q1 2017 performance.

Adidas

 

On the right track? Adidas rallied firmly on Friday (July 28th) to a new all-time high of €192 as it upgraded its full-year profits for the second time this year. The sportswear brand reports first half results on Thursday (August 3rd) after recording a 20% leap in Q2 revenues to €5bn.

Operating profit increased 18% to € 505 million in the second quarter of 2017, which it said was driven by a higher gross margin as well as operating expense leverage. Net income increased 16% to € 347 million during the quarter (2016: € 301 million).

Goldman Sachs says: “We believe the pre-announcement further reflects ongoing strength of the core adidas brand globally which combined with improving cost efficiency indicates the business is beginning to reflect its pricing power in fundamentals.”  The company has one of the strongest mid-term earnings outlooks in the retail & luxury goods sector, according to the bank. Goldman raised its 12-month price target on the stock from €204 to €225.

Siemens

 

Shares in Siemens have skidded about 13% lower in the last three months despite a strong performance in the second quarter of its financial year. The earnings beat in May failed to arrest the decline and the stock has retreated to levels last seen at the start of the year.

Earnings in the quarter rose 6% to more than €20bn, while net income also beat forecasts at €1.45bn. The earnings from the industrial businesses rose 18% and even when accounting for changes to pension accounting, was 3% ahead of forecasts.

DAX index weightings

 

Index weightings play a big part in why indices can trade in surprising directions. The FTSE 100 is well known for its biggest hitters being dollar earners – think British American Tobacco, Diageo and oil majors Shell and BP.

The DAX similarly features some stocks that have a much great impact on the index than others.

The biggest stocks by index weighting* are Siemens (10.46%), Bayer (8.95%), SAP (8.91%) and Allianz (7.84%). Although just 13% of the stocks listed on the index, these four companies make up more than third of the index by weighting.

DAX earnings due this week

 

Tuesday

Fresenius ST (FME) – Q2/2017, EPS estimate0.930

Fresenius SE (FRE) – Q2/2017, EPS estimate 0.820

HeidelbergCement (HEI) – Q2/2017, EPS estimate 1.893

Infineon Technologies (IFXX) – Ae/2017, EPS estimate 0.231

Wednesday

Commerzbank (CBK) – Q2/2017, EPS estimate 0.070

Deutsche Lufthansa (LHA) – Q2/2017, EPS estimate 1.023

Vonovia (VNA) – Q2/2017, EPS estimate 0.475

Thursday

Adidas (ADS) – Q2/2017, EPS estimate 1.315

Bayerische Motoren Werke (BMW) – Q2/2017, EPS estimate 3.140

Beiersdorf (BEI) – S1/2017, EPS estimate 1.712

Deutsche Telekom (DTE) – Q2/2017, EPS estimate 0.285

Merck KGaA (MRK) – Q2/2017, EPS estimate 1.594

Siemens (SIE) – Q3/2017, EPS estimate 1.613

Friday

Allianz (ALV) – Q2/2017, EPS estimate 3.443

*Index weightings correct as of quarterly review effect March 20th 2017

 

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